The Information Commissioner's Office has defended its approach to Google's Street View scan of unsecured Wi-Fi networks, after being criticised by MPs and privacy campaigners for a lack of action.

On Monday, the UK's privacy watchdog replied to comments made during a parliamentary debate on internet privacy (PDF), which covered the response of the Information Commissioner's Office (ICO) to Google's collection of data from home networks.

"This week the Metropolitan Police have... closed their case, believing it would not be appropriate to pursue a criminal case against Google under the Regulation of Investigatory Powers Act (Ripa)," the ICO said in a statement. "Whilst we continue to work with our other international counterparts on this issue, we will not be panicked into a knee-jerk response to an alarmist agenda."

The parliamentary discussion on Thursday was called by Robert Halfon MP, who said that he was concerned about a "privatised surveillance society". He specifically mentioned Google's admission on 22 October that it had collected passwords and whole emails in its Street View sweep of unsecured Wi-Fi networks.

In the debate, Halfon questioned whether the ICO had taken appropriate steps to check the data that Google had collected, saying the watchdog's response had been "lamentable".

"Contrary to what the information commissioner announced this year, and contrary to what Google said to me in September 2010, meaningful personal data were collected in significant amounts," said Halfon. "The issue is simple: either meaningful personal data were collected in significant amounts, or they were not. In July 2010, we were told that they were not; in October 2010, we were told that they were."

Last Monday, the ICO said it was reviving its probe into Google's data collection. It had discontinued the investigation in July, after finding that the payload data gathered by Street View cars did not contain any "meaningful details".

In its response to the parliamentary debate, the ICO said that some MPs had not understood its approach to the issue.

"Having followed the debate... it became apparent that a great deal of misunderstanding exists about what actions we have already taken and what we are doing in relation to Google Street View. We are keen to discuss with MPs and ministers how we can further defend privacy on the internet as technologies and applications develop," it said.

Halfon told MPs that information commissioner Christopher Graham had felt that he did not have the power to take stronger action against Google.

"His view is that although he would have liked to take stronger action against Google, his office was constrained by the Data Protection Act 1998. Perhaps that is true, but why was it not said at the time?" Halfon asked. "There is nothing in the information commissioner's first announcement about insufficient powers or the constraints of the Data Protection Act. That inertia seems all the more disappointing given that other groups were working hard to protect the British public."

The privacy authority told ZDNet UK last week that it could not use its powers to fine companies up to half a million pounds against Google, as those powers were granted after its Street View probe began.

A leading UK privacy campaigner said that ICO procedures for handling privacy complaints needed to be overhauled. "My suspicion is that [the ICO] needs a full, independent, external review of all of its complaint handling procedures," Simon Davies, director of Privacy International, told ZDNet UK.